SIMON NASH, PETITIONER V. LOUIS W. SULLIVAN, SECRETARY OF HEALTH
AND HUMAN SERVICES, ET AL.
No. 88-1906
In The Supreme Court Of The United States
October Term, 1989
On Petition For A Writ Of Certiorari To The United States Court Of
Appeals For The Second Circuit
Brief For The Respondents In Opposition
TABLE OF CONTENTS
Questions Presented
Opinions below
Jurisdiction
Statement
Argument
Conclusion
OPINIONS BELOW
The opinion of the court of appeals (Pet. App. 1a-15a) is reported
at 869 F.2d 675. The opinions of the district court (Pet. App.
16a-31a, 33a-35a, 36a-43a) are unreported.
JURISDICTION
The judgment of the court of appeals (Pet. App. 68a-69a) was filed
on March 7, 1989. The petition for a writ of certiorari was filed on
May 25, 1989. The jurisdiction of this Court is invoked under 28 U.S.
C. 1254(1).
QUESTIONS PRESENTED
1. Whether the Secretary of Health and Human Services' Quality
Assurance System violated petitioner's right of decisional
independence as an ALJ.
2. Whether petitioner has standing to challenge the Secretary's
policy of non-acquiscence in his capacity as an ALJ.
STATEMENT
1. Petitioner is an Administrative Law Judge (ALJ) in the Social
Security Administration's Bureau of Hearings and Appeals. The
respondents are the Secretary of Health and Human Services, the
Commissioner of the Social Security Administration, the Director of
the Office of Personnel Management, and various officials of the
Bureau of Hearings and Appeals within the Social Security
Administration.
In 1975, the Bureau was faced with a backlog of more than 113,000
cases. To reduce the backlog, the Bureau set up several programs for
its ALJs. Three are relevant here. Under the "Peer Review Program,"
the Bureau engaged in post-adjudicatory review of ALJ decisions and
offered instructions to ALJs on the length of hearings and opinions
and the use of expert witnesses. Through the "Quality Assurance
System," the Bureau monitored the rates at which ALJs reversed state
decisions not to award Social Security benefits, attempted to identify
recurring problems, and made recommendations for improving the hearing
process. Finally, the Bureau established monthly production goals to
reduce delays experienced by claimants. Pet. App. 48a, 49a-50a.
In 1978, petitioner filed suit in district court challenging the
enforcement of these programs as inconsistent with the "decisional
independence" (Pet. App. 46a) of ALJs. The district court dismissed
petitioner's action in 1979 for lack of standing. Id. at 61a-67a.
The court of appeals reversed in substantial part. 613 F.2d 10
(1980) (Nash I) Pet. App. 44a-60a. Stating that the Administrative
Procedure Act (APA) conferred on ALJs a "special status" and a
"qualified right" of decisional independence (id. at 55a), the court
held that petitioner's complaints with respect to the Peer Review
Program, the Quality Assurance System, and monthly production goals
fell "within the zone of interests protected by the Administrative
Procedure Act and Social Security Act" (id. at 53a), and remanded to
the district court for further proceedings.
2. Following the remand, petitioner amended his complaint to add a
challenge to the Secretary's policy of non-acquiescence. That claim
was dismissed by the district court for lack of standing (Pet. App.
42a), and the remaining claims were tried by the court. After a bench
trial, the district court held in favor of the respondents on all
counts. Id. at 16a-32a. Relying on Nash I, the district court began
with the assumption that the APA provided petitioner with a right of
action against the respondents. Id. at 17a. Nonetheless, the court
found that the Peer Review Program was "primarily educational" and
that the Bureau's "goal (was) more accurate initial decisions that
better reflect the views of the agency on questions of law and policy"
(id. at 22a). The court concluded that this was a "legitimate and
lawful response to the wide disparity in legal and factual
determinations among ALJs" (id. at 23a-24a). With respect to the
Quality Assurance System, the court credited Bureau evidence that
demonstrated that "'there is no goal to reduce reversal rates -- there
is a goal to improve decisional quality & (sic) consistency which is
assumed to have as one effect a reduction of the reversal rate'" (id.
at 29a (quoting PX 106; emphasis in original)). The court
acknowledged that petitioner had offered evidence that in two
locations, New Orleans, Louisiana, and Fort Smith, Arkansas, ALJs had
been pressured to lower the rates at which they reversed the denial of
benefits by state agencies (id. at 29a). The court found, however,
that the pressure in New Orleans "did not come only from the agency
but rather from the ALJ-In-Charge" and that he was "specifically
reprimanded" for his actions (id. at 30a). The court also found that
the Bureau was concerned about reversal rates at Fort Smith, but, here
again, "the concern with reversal rates was * * * a reflection of
problems in the adjudicatory process" (ibid.). The court concluded
that "while it is clear that the agency was concerned about reversal
rates, the evidence does not support the allegations that ALJs were
subject to any direct pressure to maintain a given rate" (ibid.).
Finally, the court found that the Bureau had not established "quotas"
(id. at 25a) to mark the production level of ALJs, but rather had only
set "reasonable production goals" (id. at 26a). The court found that
the target was "not 'etched in stone,' (was) not a prescription of
how, or how quickly, an ALJ should decide a particular case," and
"(did) not dictate the content of the decision" (id. at 27a).
Accordingly, the court concluded that "goals, reasonably fixed and
applied, (were not) an infringement of the judicial independence of an
ALJ" (id. at 28a).
3. The court of appeals affirmed the district court's judgment in
all respects. 869 F.2d 675 (1989) (Nash II); Pet. App. 1a-15a.
First, the court affirmed the order dismissing petitioner's
non-acquiescence claim for lack of standing. The court reasoned that
the "only adverse consequence" for petitioner was that "his decisions
are subject to reversal by the Secretary" (id. at 6a). The court held
that this was a legally insufficient interest to confer standing on
petitioner.
Next, the court addressed petitioner's decisional independence
claims. It held that petitioner's challenges to the Peer Review
Program and Quality Assurance System were barred by the prior judgment
in Association of ALJs v. Heckler, 594 F. Supp. 1132 (D.D.C. 1984).
The court observed that petitioner was "a member of the Association,
that he consulted with the Association's counsel about the D.C.
district court litigation, and that he shared certain documents with
the Association for use in its case" (Pet. App. 8a-10a). It ruled
that petitioner "appears to have had a full and fair opportunity to be
heard in that case" (id. at 10a).
Although there were "very substantial, if not dispositive,
arguments in favor of application of the rule of res judicata," the
court felt "obliged to reach the merits of (petitioner's) claims in
view of our strong intimation in Nash I that (petitioner) was entitled
to a plenary trial" (Pet. App. 10a-11a). Before doing so, the court
clarified that its reference to a "qualified right of decisional
independence" of ALJs (id. at 55a) in Nash I was "dicta" and explained
that "Nash I stands only for the narrow premise that (petitioner) has
standing to pursue his claims" (id. at 8a). The court declined to
resolve whether petitioner had a cause of action under the APA,
however, because "the district court rejected (petitioner's) claims on
their merits" (ibid.). Thus, the court proceeded on the assumption
that petitioner had a right of decisional independence separate and
apart from the statutory protections attaching to his pay, tenure, and
freedom from performance reviews.
Realizing that "(p)olicies designed to insure a reasonable degree
of uniformity among ALJ decisions are not only within the bounds of
legitimate agency supervision but are to be encouraged" (Pet. App.
11a), the court could find "no reason to disturb (the district
court's) determination" that the Peer Review Program and production
goals "operated as() a quality control measure" (id. at 12a). The
court then turned to petitioner's claims regarding the Quality
Assurance System, which the court thought might be "cause for concern"
(id. at 13a). However, after referring to record evidence indicating
that "reversal rates were used as a benchmark in deciding whether
there might be problems in the adjudicatory methods of particularly
high (or low) reversal rate ALJs," the court concluded that the
district court's findings were not clearly erroneous (id. at 14a
(emphasis in original)). "Since the district court found no direct
pressure on ALJs to maintain a fixed percentage of reversals," the
court concluded that "the Secretary's policy in this regard did not
infringe upon the 'decisional independence' of ALJs" (id. at 15a).
ARGUMENT
Petitioner raises two issues for review by this Court: (1) whether
the Quality Assurance System violated his right of decisional
independence as an ALJ; and (2) whether he has standing to challenge
the Secretary's policy of non-acquiescence. Neither issue warrants
review. Petitioner's challenge to the Quality Assurance System is
barred by res judicata; in any event, even assuming that petitioner
has a cause of action under the APA for interference with his
decisional independence, both lower courts correctly concluded that no
such interference had been shown on the facts of this case. And
petitioner lacks standing to challenge the Secretary's
non-acquiescence practice because he has not suffered the requisite
injury-in-fact.
1. a. The petition does not respond to the court of appeals'
holding that the challenge to the Quality Assurance System is barred
by res judicata. See Pet. App. 8a-11a. In Association of ALJs v.
Heckler, 594 F. Supp. 1132 (D.D.C. 1984), a national association of
ALJs mounted a "broad challenge to various practices of the Secretary
substantially identical to those advanced by (petitioner) in this
case" (Pet. App. 9a). The complaint specifically alleged that "the
Secretary had infringed upon the decisional independence of ALJs
through policies and practices designed to monitor the decisions of
ALJs and 'pressure (them) into disposing of . . . larger numbers of
cases each year' and 'into deciding fewer cases in favor of
claimants'" (ibid. (quoting Compl. para. 18 in Association of ALJs;
brackets and ellipsis in original)). It is uncontroverted that
petitioner was a member of the Association, consulted with its counsel
about the litigation, and shared documents with the Association for
use in its case. See ibid. It follows that petitioner "appears to
have had a full and fair opportunity to be heard in that case" (id. at
10a). Petitioner's claim is therefore barred by the judgment in
Association of ALJs. Res judicata fully supports the judgment in this
case, and petitioner has offered no reason for questioning the court's
ruling on this point.
b. Even if petitioner's claims were not barred by res judicata, the
court of appeals' alternate holding rejecting the claim on the merits
would not warrant review. Petitioner claims an intra-circuit conflict
between Nash I and Nash II and an inter-circuit conflict between Nash
I and a decision of the Seventh Circuit, D'Amico v. Schweiker, 698
F.2d 903 (1983), over whether the APA grants ALJs a cause of action
for infringement of their decisional independence. See Pet. 9-13, 23.
However, Nash I does not conflict with the other decisions because,
as the court of appeals explained in Nash II, its prior statement that
the APA "confer(s) a qualified right of decisional independence upon
ALJs" (Pet. App. 55a), was dicta. The court of appeals decided Nash I
on an appeal from the district court's judgment dismissing
petitioner's action for lack of standing, and so did not reach the
merits of petitioner's claim. Thus, "Nash I stands only for the
narrow premise that (petitioner) has standing to pursue his claims"
(Pet. App. 8a). See also id. at 4a. /*/ Cf. Goodman v. Svahn, 614 F.
Supp. 726, 729 n. 3 (D.D.C. 1985) (Nash I "simply held that an ALJ *
* * was improperly dismissed for lack of standing. * * * (I)ts
decision on standing had no bearing on the merits of Nash's claim.").
Nor is there an "apparent conflict" (Pet. 12) between this case and
D'Amico v. Schweiker, supra. D'Amico "only * * * consider(ed ALJs')
standing to sue" to challenge a Social Security Administration
instruction concerning retroactive cessation of benefits. 698 F.2d at
904. It made no statement regarding a possible cause of action to
enforce ALJs' decisional independence and hence does not conflict with
the decision in this case. Any tension that exists is between D'Amico
and Nash I -- D'Amico held that ALJs lacked standing while Nash I held
that they did. But these judgments are not before the Court, and, in
any event, D'Amico found Nash I distinguishable on the facts. See 698
F.2d at 906-907.
c. This case would not, in any event, be an appropriate vehicle for
review of the question whether ALJs have a cause of action to enforce
their decisional independence, because petitioner would not prevail
even if such a right is recognized. The district court assumed that
"(a)ny attempt by the agency to mandate a prescribed reversal rate for
the ALJ corps would clearly be inappropriate and would constitute an
infringement of ALJs' decisional independence" (Pet. App. 30a).
Nevertheless, the district judge found that "(i)n this case, while it
is clear that the agency was concerned about reversal rates, the
evidence does not support the allegations that ALJs were subject to
any direct pressure to maintain a given rate" (ibid.). Accordingly,
the district court found that the Secretary's practices "did not
infringe on the decisional independence of ALJs" (id. at 31a).
Petitioner asserts that the court of appeals erred in affirming the
district court's findings concerning the Quality Assurance System, and
specifically that an incident involving ALJs in New Orleans
demonstrates that the policy infringed ALJs' decisional independence.
See Pet. 13-19. The district court, however, determined that the
pressure in New Orleans originated in factors unique to that office
("the evidence shows that the pressure in (the New Orleans) office did
not come only from the agency but rather from the ALJ-In-Charge, Carl
Sarett" (Pet. App. 29a-30a)), and hence that episode cannot be relied
on by petitioner -- a Buffalo, New York-based ALJ -- to substantiate
the infringement of his decisional independence. The New Orleans
incident was not evidence of deficiencies in the Secretary's policy
and the ALJ-In-Charge was "reprimanded by Chief ALJ Brown for
discussing reversal rates with his ALJs" (id. at 30a). The court of
appeals reviewed the record before the district court and agreed that
there was "no direct pressure on ALJs to maintain a fixed percentage
of reversals" (id. at 15a). Petitioner's fact-bound question was
decided correctly by the lower courts and does not warrant further
review.
2. Whatever the merits of the Secretary's policy of
non-acquiescence, petitioner lacks standing to challenge it because he
has not suffered the requisite injury-in-fact. As the court of
appeals explained, "(t)he only adverse consequence for (petitioner)
resulting from non-acquiescence is that his decisions are subject to
reversal by the Secretary" (Pet. App. 6a). This academic interest
falls far short of the "distinct and palpable injury to himself" that
petitioner must demonstrate (Warth v. Seldin, 422 U.S. 490, 501
(1975)).
Moreover, disappointed claimants have a far more acute and tangible
interest in the Secretary's non-acquiescence policy than do ALJs, and
they have, on several occasions, demonstrated their willingness to
pursue such challenges. See, e.g., Floyd v. Bowen, 833 F.2d 529,
531-532 (5th Cir. 1987); Stieberger v. Bowen, 801 F.2d 29, 30-38 (2d
Cir. 1986); Schisler v. Heckler, 787 F.2d 76, 81-85 (2d Cir. 1986).
See Pet. App. 6a. In these circumstances, claimant-initiated review
"is preferable to a suit by administrative law judges, who are the
umpires between claimants to social security benefits and the Social
Security Administration" (D'Amico v. Schweiker, 698 F.2d at 906). The
issue of ALJ standing to challenge the non-acquiescence policy has not
divided the lower courts, and does not raise a question sufficiently
important to warrant further review by this Court.
CONCLUSION
The petition for a writ of certiorari should be denied.
Respectfully submitted.
KENNETH W. STARR
Solicitor General
STUART E. SCHIFFER
Acting Assistant Attorney General
WILLIAM KANTER
JAY S. BYBEE
Attorneys
JULY 1989
/*/ There is no inconsistency in holding that a party has standing
but has no cause of action. See Council of & for the Blind v. Regan,
709 F.2d 1521, 1524-1525 & n.12 (D.C. Cir. 1983) (en banc) (holding
that plaintiff failed to state a claim notwithstanding earlier
decision that plaintiff had standing).